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Small-scale tea growers set to receive Sh649m dividend windfall

Wednesday, June 3rd, 2020 00:00 | By
A small scale tea farmer picks tea. Photo/PD/File

Smallholder tea farmers affiliated to Kenya Tea Development agency (KTDA)-managed factories will this month receive Sh649 million  dividends accrued from the agency for the financial year ending June 30, 2019.  

The agency said that the money was earned from the agency subsidiaries. Factories, through resolutions of their directors, resolved to pass the dividends received from KTDA holdings directly to the farmers who are the shareholders of the tea factories that own KTDA (H) Ltd.

The dividends are being paid even as the Ministry of Agriculture continues to hold that KTDA subsidiaries were established to siphon farmers’ hard-earned cash.  

Tea regulations

“What are these subsidiaries for? This is overstepping their mandate,” Agriculture Cabinet Secretary Peter Munya posed when releasing new tea regulations at Kilimo House.  

KTDA management said annual audited accounts indicate that dividends have consistently been paid to its shareholders who are the factory companies.

The agency explained that the pay slips farmers wiould receive from their respective factory companies will now confirm the actual dividend payments accrued from the subsidiaries, separate from normal monthly payments for the delivery of tea.

Subsidiaries under the agency are KTDA Management Services that deals with management of the tea factory companies in line with the recommendations made by the Tea Industry Taskforce of 2007.

They include KTDA Power which is involved in power generation, Greenland Fedha.

Fedha facilitates easy access to credit for farmers, and KETEPA, which is KTDA’s value addition arm that blends and packages tea for local consumption and export.

Others are Chai Trading Company Limited offering warehousing services, blending, clearing and forwarding, value addition, export and general tea trading.

Majani Insurance Brokers offers insurance brokerage services for tea factories and KTDA Group companies and Tea Machinery & Engineering Company Ltd provides a modern workshop for fabrication and assembly of tea machinery for tea factories.  

And KTDA Foundation undertakes corporate social investments.

Over the last five years, factory companies have received more than Sh3.7 billion in dividends from KTDA and its subsidiaries’ business activities. 

The amounts having been previously consolidated. 

The dividend is over and above what farmers earn as monthly or initial earnings.

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